<\/span><\/h2>\n\n\n\n1. Under scheme ‘A’ RBI bears exchange rate fluctuations.<\/p>\n\n\n\n
2. Under scheme ‘B’ other banks are to meet out the difference in exchange rate fluctuations.<\/p>\n\n\n\n
3. Both the schemes stand withdrawn now.<\/p>\n\n\n\n
4. Only scheme ‘A’ has been withdrawn.<\/p>\n\n\n\n
Which of the above statement(s) are correct?<\/em><\/p>\n\n\n\n(a) Only 3<\/p>\n\n\n\n
(b) 1 and 2 <\/p>\n\n\n\n
(c) 1, 2 and 3 <\/p>\n\n\n\n
(d) 1, 2 and 4<\/p>\n\n\n\n
<\/span>Ans. (d)<\/span><\/h3>\n\n\n\nThe assertions (1), (2), and (4) are accurate.<\/p>\n\n\n\n
Within the FCNR ‘A’ framework, the RBI assumed the currency risk, whereas under the FCNR ‘B’ scheme, banks shoulder this risk. The inception of the Foreign Currency Non-Resident deposits FCNR ‘A’ scheme dates back to 1975, aimed at bolstering foreign exchange reserves. FCNR accounts cater to individuals desiring to hold deposits in a foreign currency of their preference. Essentially, it constitutes a term deposit that NRIs can establish with banks in India, with a maturity period ranging from a minimum of 1 year to a maximum of 5 years. Under the FCNR ‘B’ arrangement, other banks are tasked with bridging the gap resulting from fluctuations in exchange rates. It is advisable for banks to maintain distinct ledgers for FCNR (B) deposits acquired under both schemes, accompanied by a comprehensive audit trail of transactions.<\/p>\n\n\n\n
The FCNR (A) initiative was discontinued in 1993 and replaced by FCNR (B) (B for bank). At present, FCNR (B) deposits can be made in 6 currencies: US Dollar, Pound Sterling, Japanese Yen, Euro, Australian Dollar, and Canadian Dollar. FCNR (B) continues to be operational. Consequently, statement (3) is incorrect.<\/p>\n\n\n\n
<\/span>Q3. Which of the following are among the non-plan expenditures of the Government of India? (1995)<\/span><\/h2>\n\n\n\n1. Defence expenditure<\/p>\n\n\n\n
2. Subsidies<\/p>\n\n\n\n
3. All expenditures linked with the previous plan periods<\/p>\n\n\n\n
4. Interest payment<\/p>\n\n\n\n
(a) 1 and 2<\/p>\n\n\n\n
(b) 1 and 3<\/p>\n\n\n\n
(c) 2 and 4<\/p>\n\n\n\n
(d) 1, 2, 3 and 4<\/p>\n\n\n\n
<\/span>Ans. (d)<\/span><\/h3>\n\n\n\nAll the statements are accurate.
<\/span>Q4. Corporation tax (1995)<\/span><\/h2>\n\n\n\n(a) is levied and appropriated by the States<\/p>\n\n\n\n
(b) is levied by the Union and collected and appropriated by the States<\/p>\n\n\n\n
(c) is levied by the Union and shared by the Union and the States<\/p>\n\n\n\n
(d) is levied by the Union and belongs to it exclusively<\/p>\n\n\n\n
<\/span>Ans. (c)<\/span><\/h3>\n\n\n\nThe Corporation tax is imposed by the Union and distributed between the Union and the States. Corporation Tax, also known as Corporate Tax, is a direct tax imposed on the net income or profits of corporate entities, whether derived from domestic or foreign business activities. This tax falls within the Union List and is distributed according to the provisions outlined in Article 270. Tolls, sales taxes, land revenue, and vehicle taxes are among the taxes imposed and allocated by the States.<\/p>\n\n\n\n
<\/span>Q5. Which one of the following is not an instrument of selective credit control in India? (1995)<\/span><\/h2>\n\n\n\n(a) Regulation of consumer credit<\/p>\n\n\n\n
(b) Rationing of credit<\/p>\n\n\n\n
(c) Margin requirements<\/p>\n\n\n\n
(d) Variable cost reserve ratios<\/p>\n\n\n\n
<\/span>Ans. (d)<\/span><\/h3>\n\n\n\nAmong the provided options, Variable cost reserve ratios, which in India is also referred to as Statutory Liquidity Ratio (SLR), is not employed as an instrument of selective credit control in India. Selective or Qualitative Credit Control is utilized to channel credit towards certain activities while restricting and rationing it for others based on priorities and objectives, without altering the total volume of credit. Conversely, Bank Rate, Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), Repo Rate, and Open Market Operations are instruments of quantitative credit control under monetary policy.<\/p>\n\n\n\n
SLR not only aids in credit control but also supports the government’s borrowing programs.<\/p>\n\n\n\n
<\/span>Q6. The Narasimhan Committee for Financial sector Reforms has suggested reduction in (1995)<\/span><\/h2>\n\n\n\n(a) SLR and CRR<\/p>\n\n\n\n
(b) SLR, CRR and Priority Sector Financing<\/p>\n\n\n\n
(c) SLR and Financing to capital goods sector<\/p>\n\n\n\n
(d) CRR, Priority Sector Financing and Financing to capital goods sector<\/p>\n\n\n\n
The Narasimhan Committee on Financial Sector Reforms proposed a decrease in SLR, CRR, and Priority Sector Financing. Established in August 1991, the committee was tasked with examining all facets of India’s financial system. Its primary recommendation was to gradually reduce SLR to 25% and CRR to 10%. Additionally, the committee proposed that banks should have greater funds available for deployment in profitable loan assets as a result of lower SLR and CRR requirements.<\/p>\n\n\n\n
<\/span>Ans. (b)<\/span><\/h3>\n\n\n\n<\/span>Q7. The price fluctuations of 4 scripts in a stock market in the four quarters of a year are shown in the table below. Four different investors had the following portfolios of investment in the four companies throughout the year. (1995)<\/span><\/h2>\n\n\n\nInvestor 1 10 of A, 20 of B, 30 of C and 40 of D<\/p>\n\n\n\n
Investor 2 40 of A, 10 of B, 20 of C and 30 of D<\/p>\n\n\n\n
Investor 3 30 of A, 40 of B, 10 of C and 20 of D<\/p>\n\n\n\n
Investor 4 20 of A, 30 of B, 40 of C and 10 of D<\/p>\n\n\n\n
Stock Market Performance<\/strong><\/p>\n\n\n\n<\/td> I<\/td> II<\/td> III<\/td> IV<\/td><\/tr> <\/td> Quarter<\/td> Quarter<\/td> Quarter<\/td> Quarter<\/td><\/tr> Script A<\/td> Up 10%<\/td> Down 15%<\/td> Up 10%<\/td> Down 10%<\/td><\/tr> Script B<\/td> Up 2%<\/td> Up 1%<\/td> Up 2%<\/td> Up 2%<\/td><\/tr> Script C<\/td> Up 1%<\/td> Up 1%<\/td> Down 1%<\/td> Down 1%<\/td><\/tr> Script D<\/td> Up 20%<\/td> Down 15%<\/td> Up 30%<\/td> Down 10%<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\nIn the light of the above which one of the following statements is correct?<\/em><\/p>\n\n\n\n(a) Investor 2 has made the best investment<\/p>\n\n\n\n
(b) Investor 1 has made the best investment<\/p>\n\n\n\n
(c) Investor 2 suffered a net loss during the year<\/p>\n\n\n\n
(d) Investor 3 suffered a net loss during the year<\/p>\n\n\n\n
<\/span>Ans . (b)<\/span><\/h3>\n\n\n\nBased on the provided information, Investor 1 has made the most advantageous investment. This is evidenced by their substantial subscription of 40 units in scrip D, which yields the highest effective profit of 25% at the end of the year. In contrast, the other scrips\u2014A and C\u2014are experiencing significant losses, while scrip B is generating a modest profit of 6%. Therefore, Investor 1’s investment in scrip D stands out as the most lucrative choice.<\/p>\n\n\n\n
<\/span>Q8. The main reason for low growth rate in India, inspite capital formation is of high rate of savings and capital formation is (1995) <\/span><\/h2>\n\n\n\n(a) high birth rate <\/p>\n\n\n\n
(b) low level of foreign aid<\/p>\n\n\n\n
(c) low capital\/output ratio <\/p>\n\n\n\n
(d) high capital\/output ratio<\/p>\n\n\n\n
<\/span>Ans. (d)<\/span><\/h3>\n\n\n\nThe primary factor contributing to the low growth rate in India, despite the country’s high rate of savings and capital formation, is the “high capital\/output ratio.” The capital output ratio delineates the connection between investment levels and the resultant economic growth.<\/p>\n\n\n\n
In economics, there exists a straightforward equation that elucidates the interplay among investment, capital output ratio, and economic growth, expressed as G = S\/V. Here, G represents economic growth, S denotes saving as a percentage of GDP, and V signifies the capital output ratio.<\/p>\n\n\n\n
<\/span>Q9. Consider the following. (1995)<\/span><\/h2>\n\n\n\n1. Industrial Finance Corporation of India (IFCI).<\/p>\n\n\n\n
2. Industrial Credit and Investment Corporation of India (ICICI).<\/p>\n\n\n\n
3. Industrial Development Bank of India (IDBI).<\/p>\n\n\n\n
4. Unit Trust of India (UTI).<\/p>\n\n\n\n
The correct sequence in which the above were established is<\/em><\/p>\n\n\n\n(a) 1,2,4,3 <\/p>\n\n\n\n
(b) 1,3,2,4 <\/p>\n\n\n\n
(c) 4,3,2,1 <\/p>\n\n\n\n
(d) 1,4,3,2<\/p>\n\n\n\n
<\/span>Ans. (a)<\/span><\/h3>\n\n\n\nThe correct sequence of the establishment of the given options is 1, 2, 4, 3. The Industrial Finance Corporation of India (IFCI) Ltd was set up as a Statutory Corporation in 1948, for providing medium and long-term finance to industry. The Industrial Credit and Investment Corporation of India was established in 1955. It was established as the ICICI bank in 1994. Unit Trust of India (UTI) was established in 1963, by an Act of Parliament. It was repealed in 2003, paving way for the bifurcation of UTI into: Unit Trust of India and UTI Mutual Fund. Industrial Development Bank of India (IDBI) was constituted in 1964, as a Development Financial Institution (DFI). On 1st, October 2004, the erstwhile IDBI was converted into a banking company – IDBI Ltd.<\/p>\n\n\n\n
<\/span>Q10. Agricultural Income Tax is assigned to the State government by (1995)<\/span><\/h2>\n\n\n\n